Seeking Alpha by Adding Beta

First Avatar movie got released in 2009 in midst of market turmoil due to housing crisis. 13 years later,  "Avatar - The way of Water" got released this week - again in the midst of post-pandemic, inflation driven market turmoil. James Cameron took 13 years to make second Avatar movie and I am sure it would be another blockbuster like first one (needs to make $2B box-office collection just to break even). But "Fed" up sequel seems to have repeated in just 4 years. Last time I wrote with exact same topic was in Oct 2018.  Most of the content in that blog could be repeated here. Markets are frustrated that Fed is again behind the curve by continuing to raise rates till it reaches 5.1% even though everyone fears that economy is heading into recession. As reaction to Fed meeting and Powell's Q&A session, markets crashed to send a message - enough! But Powell's fed wants to make sure that inflation is really coming down and willing to take the risk of "t

Last week was one of the most eventful week - elections, crypto crash, soft inflation triggered massive rally in stock markets, layoffs at Meta and many other tech peers, slow counting of votes and of course the chaos at Twitter.....each of these can be a blog topic. But let's focus on how FTX "House of Cards" came crashing due to "Game of Thrones" in Crypto Universe! I have written about Cryptos in my previous blogs  " Coinbase IPO : Netscape or Webvan moment for Crypto",  " Crypto-currencies : Fad, Fraud or Frontier",  " Tulips, Eyeballs and Dogecoin " Many of those hypothesis and predictions came to forefront this week which led to collapse of FTX - once valued at $32 Billion and its young founder Sam Bankman-Fried became from hero to villain.  FTX was saving crypto world during summer meltdown by buying or supporting other smaller "houses of cards" built on fraud coins, over-leverage, no regulations...no one had any id

Many of you know the famous Gordon Gekko (played by Michael Douglas) dialogue from the 1987 movie Wall Street - "Greed is Good". Well - on the eve of mid-term elections, let me tweak that dialogue into a political context and say "Gridlock is Good". Over the last two years, we've had a one-sided government within all branches of government (President, House and Senate controlled by Democrats). We got some meaningful policy actions done by Biden and Congress. But some of those actions also created the inflation mess that the economy is dealing with (another reason is slow action by Fed in raising interest rates) as well as gyrations in stock markets. Most of the predictions suggest that Democrats are going to lose House by a few seats and there is small possibility that they may lose control of Senate (my prediction is that the Senate will remain 50:50). Either way, with the House gone to GOP, there would be "gridlock" in Washington. Here are my reason

I have a written few blog posts about Tesla while it was still a small company with a market cap of less than $10B (unfortunately, I did not follow my own advice of owning the stock instead of or in addition to the car; as the saying goes, hindsight is 20/20). Now that Tesla is a much bigger company (with a market cap equal to or greater than all the other car companies in the world combined), it's time to take another look at the company and the stock. So here it goes. $TSLA reached a 52 week low this week despite very optimistic "pedal to the metal" projections from Elon Musk. After touching a $1 trillion valuation, it has been sliding down (call it the trillion dollar curse, similar to what Meta also experienced – but that's another blog topic) and lost over 40% in 2022. What's impacting Tesla and its stock? There are 4 "C"s which will decide what's next for the company. Competition: It used to be EV + Autonomous Driving + Cool Factor = Tesla just

After long hiatus due to personal reasons, it's time to get back to blogging. And what better day to start than on first day after historically worst month for markets. This year was no different. Sept kept to its reputation as worst month with markets ending at lowest point for 2022 (S&P down by 25% and Nasdaq by 32%). This week saw the leaders (like Apple etc) taking the hit...that may be an indication that markets may be getting closer to bottom...now that we are in Oct which had the reputation of having worst crashes, we may get one or two big crashes...that would be clear sign of market bottom. As they say "Don't fight the Fed" - that holds true in both directions. Fed is determined to get back it's credibility and will not (and should not) pause interest rate hikes till inflation indicators show clear downward trend....It's possible that Fed may do more than needed and damage the economy at least for short run...Economists, companies and policy maker

Mayday  is an emergency  procedure word  used internationally as a  distress signal  in  voice-procedure  radio communications. May 4, or, "May the 4th Be With You,"  marks a celebration of all things Star Wars  attributed to famous phrase "May the Force be with You" used by Jedi Masters! After dreadful month of Apr and worst start of year for Nasdaq ever, high-tech growth stocks are sending "Mayday" signal and hoping that some kind of Force would save them from daily pounding. It feels like dot.com bust all over again. Covid pandemic pulled forward growth of many high-flying stocks. Now that pandemic is over as worldwide issue despite spurts in Chinese cities and even in New York, investors are worried about lack of growth for once high-flying growth companies. Even "FANG" group is not spared. Many stocks are back to where they were before pandemic. For few of them, 5 years of gains got wiped out in last 5 months.  So obvious question is - what&

It's that time of the season when NCAA Basketball have their March Madness tournament in which college basketball teams play to win National Championship and millions of brackets are published. At one time, Buffet announced  $1 Billion prize money to anyone with 100% accurate bracket - no one won it. It's just impossible probability ( one in 9.2 quintillion ). But it's fun - This year my ranking is close to half-million in CBS Sports Men's Bracket Challenge even with 30 correct predictions till now. March also brings another interesting aspect about markets - in last 15 years, markets have reached bottom 2 times during March. March 9, 2009 during housing bubble crash and March 23, 2020 during pandemic induced crash. So we may be in for repeat of this pattern when S&P reached short-term bottom on Mar 7 2022  (at 4170).  Based on how most of the indexes recovered since then, it feels that way. Even Chinese stocks seem to have reached bottom on Mar 15, 2022 and roared 

Similar to The Four Ps of marketing mix (Product, Price, Place and Promotion), I was thinking of The Four Ps of (current state) of Stock Markets. Let's look at "The Four Ps of Markets" Post P andemic Growth: Pandemic pulled forward growth of many companies such as Zoom, Roku, Netflix streaming numbers, enterprise spending, cloud growth etc. 2 years later Pandemic seems to be on its way out and world is returning to normalcy. Post earnings calls. Markets started worrying about what would post pandemic growth look like for high-growth companies. Stock prices of most of these companies reached peak 12-15 months back and are now 50-80% down from those peaks (Zoom stock reached peak in Oct 2020 when it was valued more than IBM). High double digit (in some cases triple digit) growth is over and these companies must be valued based on growth going forward. Even achieving 30-50% growth on bigger numbers is going to be difficult. And we all know what happens when growth music stop

Exactly two years back first COVID case was detected in US. Two years, Two Presidents from two parties with very different approaches to dealing with COVID and USA is still having highest daily cases, highest hospitalizations and unfortunately deaths due to COVID. Unfortunate state of affairs despite having three effective vaccines and majority of people vaccinated. After two years,  people are frustated and have moved on and treating COVID like endemic which is going to stay with us for many years to come. That's going to be normal world in 2022. All of us should continue to wear masks and take eligible vaccine boosters when available. While world is adjusting to Covid as endemic, markets are trying to adjust to post-pandemic economic world. Let's look at few macro attributes and their effects on stock markets in 2022 Inflation running very hot and is at 40 year high reminding people of Volcker Fed days Supply and labor shortages - I experienced it first hand 30 min to pick co

To all my readers, wish you belated happy new year. After travel back from India I kept on postponing my new year blog for no reason...In a way it was good thing since I would not have expected so much market action in first three days of new year. Before we get into what could be in store for 2022, let's look at how some of the predictions/recommendations did for 2021. Macro Predictions: GDP growth, interest rates and unemployment rates were on target as per predictions. S&P did much better than predicted (20% better) Schools did open in Fall'21 COVID predictions were completely off the mark partially due to emergence of Delta and Omicron variants - who would have thought that we would be having million cases (daily) in US in 2022? Stock recommendations: Winners: SPG (94%), MAC (75%) and WFC (75%), XOM (59%), OKE (51%) Losers: CLVS (46%), BABA (44%), SQ (36%), NIO (33%) Overall portfolio of recommendations did no better than S&P's return of 27% (when it comes to my